SEC Eases Auditor Independence Rules for Private Equity (1)

The SEC issued a final rule package Friday that relaxes the threshold for the types of relationships and lending activities that could violate strict conflict-of-interest rules by swaying an auditor’s objectivity.

Approved in a 3-2 vote, the rule changes specifically target relationships among auditors and their clients that are held in funds like private equity portfolios, along with a set of changes designed to clarify when auditors’ personal banking and financial decisions may also impair their independence.

Despite the revisions, key aspects of the Enron-era rules remain, including the list of services that firms can’t provide to audit clients ...